Just a week ago, the Central Bureau of Statistics reported that, of the fourteen largest cities in Israel, Rishon Lezion has the highest average net monthly income per household, at NIS 19,182. That makes it serve as an excellent example of the crazy distortion in Israel that results in increasingly wealthy residents in towns and cities that are becoming steadily poorer. Rishon Lezion, with all its shopping malls and 250,000 people, enjoys municipal rates of NIS 802 million annually (half of it from residential properties). Only against that, the city's expenditure in 2015 amounted to (hold on tight) NIS 2.55 billion. The municipality spent NIS 515 million on education alone, NIS 180 million on welfare, and NIS 340 million on servicing debt.
It seems that in Israel the mechanism encourages corruption – by the city itself, and then by its officials. The pursuit of income to cover the deficits long ago turned the municipalities into sponsors of almost legitimate criminality, that beckons breaches of construction laws and regulations. So, for example, the Petah Tikva municipality benefits from the huge, and illegal, commercial precinct at Yarkonim; Bnei Brak is happy to collect commercial rates on the Design Center furniture mall, built almost entirely without permits; and Givat Shmuel postpones the eviction of a blatantly illegal events venue constructed within its jurisdiction. The examples are many. Corruption in local government has become almost obligatory in the face of a distorted, inefficient system that no-one has dared to touch for seventy years. Many of the ills stem directly from the built-in budgetary failure and the impotence that afflict local government.
This is the main reason for the central government's inability to produce, quickly, the massive supply of new homes required in order to change the balance between supply and demand in the housing market. When local authorities lose between NIS 4,000 and NIS 12,000 annually on every additional household, despite the municipal rates that we pay every month and that we are all sure are too high, it is abundantly clear that they have to oppose any new residential project slated to be built in their cities, or alternatively to seek the money above or below the table, from the minister of the day or from the contractor of the day, just to stay afloat.
This is where the seeds of corruption are sown, at both the municipal and the personal level. We have become so accustomed to this situation, that we have already forgotten the thick State Comptroller's report on local authorities published just two weeks ago, with its findings of a slew of offences against planning and building laws. If criminality is almost institutionalized at the municipal level, it is practically inevitable that that the mayor and other senior officials will ask themselves at some stage why they should approve additional building rights for a contractor, extra rights worth millions to him but that only causes them financial and personal headaches (existing residents will complain about worse traffic and overcrowding in schools and kindergartens), without taking something for their own pockets.
Without detracting one iota from the seriousness of the crimes, it should be clear that if dozens of local authority officials are at one stage or another of criminal investigations, and if only recently three important and well-known mayors (Ehud Olmert, Shlomo Lahiani, and Zvi Bar) emerged from jail, it's a sign that the problem lies with the system as well.
The problem is that central government benefits from the impotence and burgeoning criminality in local government. When local authorities are weak – and tiny Israel has 2,114 separate communities (cities, community settlements, moshavim, kibbutzim, and so forth) – this naturally creates complete dependence on government handouts and ministries. Aside from prosperous and combative Tel Aviv (which any day now is liable to demand independence like Catalonia), there are 75 poor and submissive cities and towns whose mayors are highly dependent on the largesse of the government of Israel, which is happy to leave local government chaotic and weak. So what if that weakness breeds corruption and shady deals? Besides, even if only those who run the cities know what they really need, how is it possible to give greater power to those those corrupt paupers down there?
Published by Globes [online], Israel business news - www.globes-online.com - on December 4, 2017
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